Perfect Gasoline Storm

A perfect storm is brewing that could drive US gasoline prices up radically and keep them that way for the long term. Clarification: there's an equally plausible scenario in which gasoline prices spike this summer, in the usual fashion, and then drop before winter, continuing the average up slope we've seen over the last 5 years. Let's go with the first and more radical scenario, though, and refer to it as the "perfect gasoline storm" (PGS). Short term (1-year) PGS plausibility hangs on several overlapping and well-understood future drivers: a 2006 hurricane season with frequent and intense storms; continued slow expansion of refining capacity; continued 2%+ annual growth in US demand; political instability in oil producing nations; decreased ability of US Federal and state governments to significantly influence fuel supplies though national policy; and, inability of domestic ethanol production to meet oxygenate demand as ethanol increasingly becomes the MTBE substitute of choice. Other, less anticipated, drivers loom as well.European refineries which focus on diesel and export gasoline to the US have practical and political limits. A hurricane strike on major US port(s) would further limit the potential for emergency imports to alleviate shortages.

It is not possible to turn enough of the fleet over to hybrids and ultra efficient small cars to make difference in the short term toward lowering the national gasoline consumption rate.

There is always a chance of explosion at one or more major refineries, unrelated to storms or terrorism.

Much of what we promote on TreeHugger will be relegated to "background noise" if gasoline prices toss into the air the assumed constants of American life-style. However, several positive outcomes are likely.

  • All locally produced goods, and especially food, will become increasingly cost competitive.
  • Bicycle sales and related services will skyrocket.
  • Motor cycle and scooter use will become more common during the warm months.
  • Developers will gravitate to the higher density "live/work/play" planned community models.
  • Traffic congestion will be mitigated as carpooling and errand sharing become more commonplace.
  • Cynicism toward alternative designs and life styles will be reduced.